Profiles of the Companies Involved

In Indonesia’s resource exploitation industries, whether logging, mining or plantations, private companies tend not to start new ventures under their own name. Instead, they will often set up new companies with neutral-sounding names. This means it is not immediately obvious whose interests lie behind any particular proposed plantation. We have tried to find out as much information as we can about the companies who may be involved in MIFEE, but some remain a mystery.

Many of the companies are owned by the conglomerate businesses of Indonesia’s elite. Almost all of the Indonesian-owned businesses involved in MIFEE are headed by someone whose name regularly features on lists of Indonesia’s richest individuals. This is common across Indonesia, where owners of large business empires almost invariably have interests in plantations, especially oil palm. Many of these mega-rich conglomerate owners also have political careers, or have built up their business empires through relationships with politicians, particularly in the Suharto era. Business links with the military are also an important link in the chain; but although we know they exist, they are not usually out in the open, and so it is harder to track down the exact connections.

How are Indonesia’s elite involved in MIFEE?

Name

Company

Position in Forbes Rich List 2011

Political Affiliations

Arifin Panigoro

Medco

(21st in 2010, but slipped off the list in 2011)

Previously key figure in PDI-P, Partai Demokrasi Pembaruan

Peter Sondakh

Rajawali

8

Martua Sitorus

Wilmar

7

Prabowo Subianto

Kertas Nusantara

Leader of Gerindra Party, vice-presidential candidate 2009

Hashim Djojohadikusumo

Comexindo

32

Siswono Yudohusodo

Bangun Cipta Sarana

Golkar Party, former minister and vice-presidential candidate

Murdaya Poo + Siti Hartati Murdaya

Central Cipta Murdaya

14

Tomy Winata

Sumber Alam Sutera

Marimutu Sinivasan

Texmaco

Eka Tjipta Widjaja

Sinar Mas (plans in Merauke not yet clear)

3

Anthoni Salim

Salim Group (plans in Merauke not yet clear)

5

Aburizal Bakrie

Bakrie Sumatera Plantations (pulled out of MIFEE in 2010)

30

Leader of Golkar Party, likely presidential candidate 2014

Foreign Companies appear to have been more cautious. The $4 billion planned investment from the Saudi bin Laden group never materialised, and there have been no further updates from Japan’s Mitsubishi Corporation about the investment it was planning in late 2009.1 The exception has been South Korean companies. This includes Korindo, an Indonesian-based Korean company that has already had an involvement in southern Papua for many years through its oil palm and timber operations, and has some of the most ambitious plans for Merauke. Then there are two other Korean companies who are planning to proceed with plantation plans; Daewoo International Corporation and Moorim Paper. Another Korean company, LG corporation, also has a significant stake in Medco’s forestry plans.

One potential investor, Teknix Capital, run by Australians in Indonesia, describes its aims as follows: “Its mandate is to acquire or originate early stage investment opportunities, with particular focus on the natural resource and manufacturing sectors in Indonesia, and develop them until a profitable track record has been established, at which point later stage investors are invited to acquire them or contribute to their further development.” The company is staffed by people who understand what it takes to start-up new businesses in Indonesia and can then pass them on at a large profit once the initial obstacles have been overcome. It seems likely that some of the bigger companies involved in MIFEE, especially Medco and Korindo, also have the ambition of using their local contacts and experience to facilitate the entry of other companies, given that the two companies have track records of looking for partners.

This speculative approach may also explain why so many investors remain unknown, waiting for increased likelihood of a return on their investment or a well-resourced partner to assume responsibility for managing the plantation. Significantly, Teknix Capital appeared not to be make any progress on their project for a number of years, but still was committed enough to fight a legal battle up to the Supreme Court level after another company was awarded the land they hadn’t developed.

In the following section are profiles of the potential investors that are known of so far, including reports on what their progress might be, the ownership of the company and examples of other destructive projects they may be involved in around West Papua and Indonesia. To give some indication of what stage each company is at, they are grouped into four categories. First of all the companies that are already operational, clearing forest and planting crops. Secondly are the companies who have not yet started work on the land, but who are actively progressing with plans to get permits and access to land. Next come a group of companies who have permits, and who may be pushing ahead with plans, but there is no news of their plans in Merauke. Finally there are a few companies who, as far as we know, do not have permits, but have been quoted in the national press as having an interest.

Hopefully this information will give a more detailed guide to which companies actually are involved, to help clarify the confusing lists which often appear in media articles about MIFEE.